According to Jeremy Leonard, managing director of global industry services at Oxford Economics, steel demand growth from the automotive and construction sectors is expected to remain moderate over the medium term, despite robust economic performance in the United States.
Leonard spoke on Wednesday, January 28, in Houston, Texas, at the Fastmarkets conference "Circular Steel Summit 2026" on the topic "Prospects for steel demand in the automotive and construction industries", presenting a forward-looking assessment of the main factors determining steel demand.
Steel production and prices
The Article 232 tariffs supported U.
S. steel production, which grew through 2025 even amid low end-market demand, Leonard said, adding that this was due to production in other developed regions, especially Europe.
Looking ahead, the company expects U.
S. steel production growth to remain positive but subdued, reflecting sluggish demand for automobiles and only modest momentum in construction.
Steel prices have increased following recent tariff measures, but not to the same extent as after the initial Section 232 tariffs were imposed in 2018. Leonard attributed this to the weakening of underlying demand conditions and greater cost absorption in supply chains.
"Compared to previous cycles, the demand situation is fundamentally different today," Leonard said, adding that steel prices are expected to rise, but without a sharp increase.
Automotive industry: demand is stable, but structurally limited
Oxford Economics maintains a relatively optimistic outlook for the U.
S. economy as a whole, with gross domestic product growth expected to outpace that of most other advanced economies. But Leonard cautioned that this strength is concentrated in areas such as data centers and artificial intelligence (AI), rather than in broad consumer demand.
In the automotive sector, fears that tariffs and inflation will significantly limit demand for cars have not yet been justified. Leonard said the higher costs associated with tariffs are mostly covered by automakers and overseas suppliers, which limits the impact on final car prices.
Oxford Economics estimates that about $20 billion in costs were absorbed in the automotive supply chains, which supported demand in the short term. But Leonard warned that such dynamics are unsustainable, and said that price pressures could intensify if tariffs remain in place.
Demand for cars is still constrained by high financial costs, which have not significantly decreased, despite the stabilization of the Federal interest rate.
